The LARGEST online resource for all your home financing and relocation needs.
Find the best rates today!
Slashing Your Debt with Home Equity ConsolidationGet today's rates from 4 lenders.
The economy is booming. So is your debt.
This year, the official household savings rate fell to the lowest level since the Great Depression. But with households gaining so much real estate equity, you can manage that debt, according to a team of money-saving experts who've pooled their expertise to extol the virtues of transforming many debts into one.
Debt consolidation comes with the possibility of a single payment, and a low interest rate that allows you to pay off your indebtedness in less time for less money -- provided you practice sound financial behavior. To help to that end a timely tome "Slash Your Debt: Save Money and Secure Your Future," (Financial Literary Center, $8.95) devotes a full chapter to tapping your equity as a cure for indebtedness.
Provided you've got the equity, you have two options.
More than one third of all home equity loans are used for debt consolidation, according to Marc Eisenson, one of the book's author and a partner with the home-based consumer advocacy firm Good Advice Press in Elizaville, NY.
To make home equity loans work as a debt consolidation tool, Eisenson and co-author and partner Nancy Castleman advise:
With a refinanced mortgage, for the same mortgage payment or less than you've been making each month, you can pay off more expensive debts. If you take out the loan for 30 years, however, you'll borrow against more of your home equity for a longer period. That could be both expensive and risky, by putting your home in jeopardy for a longer period than the previous mortgage.